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The TSL industry is one of the fastest growing branches of industry. Every year thousands of new vehicles are added to the fleets of transport companies. For forwarding agents it is a serious logistic challenge and for companies a costly expense. That is why truck leasing has become a common practice. See what it is and if it is profitable!
What is truck leasing?
Leasing is a civil law contract regulated in Polish law by the Civil Code. The parties to the contract are the lessee and the lessor. In case of a truck lease agreement, the parties agree that the lessor will lease the vehicle to the lessee and the lessee will pay a monthly fee.
What distinguishes a truck lease from a rental agreement is the possibility for the lessee to buy the object of the lease at the end of the contract term. Therefore, the parties should already indicate in the contract the price at which the lessee can buy the vehicle. Leasing is an attractive alternative to renting because the purchase price of the object of the contract is usually 1% of its value. Leasing is also connected with the necessity to pay an initial fee, the amount of which determines the amount of monthly instalments.
Leasing can take various forms. The two most popular are:
- finance lease – the object of the agreement is included in the assets of the lessee, who is obliged to make depreciation write-offs and repairs to the object. When the contract expires, the object of the lease automatically becomes the property of the lessee;
- operating lease – the object of the agreement is included in the fixed assets of the lessor who may make depreciation deductions. The monthly payments made by the lessee do not cover the value of the asset – the parties agree how much the asset can be bought back at the end of the agreement and the lessee pays an initial payment.
Truck lease financing costs
The costs of leasing a truck depend on several criteria, including first of all whether it is an operating lease or a finance lease.
1. Operating lease
In this case, the lessee can use the truck without having to buy it. Although the lessee may deduct the full amount of VAT, it is spread over all instalments. The total costs are also affected by the possibility to deduct specific sums as tax-deductible expenses, e.g. the lease instalment or the costs of operating the truck.
2. Finance lease
In this case, the biggest cost is the initial rent and the necessity to pay the full VAT, which can only be deducted later. The lessee makes depreciation deductions as the truck is part of his assets.
The cost of leasing is also affected by the weight of the vehicle, as this determines how much VAT is deductible:
- for vehicles heavier than 3.5t, the full amount of tax (100%) can be unconditionally deducted,
- for vehicles lighter than 3.5 t, it is possible to deduct the full amount of tax (100%), if the machine is used exclusively to meet the needs of the company and half of tax (50%), when the car is also used for private purposes.
Main photo: material from the client